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Filed under: Government/Legal , Chrysler, LLC. , GM , Earnings/Financials On Monday, December 29, Chrysler and General Motors were supposed to get the first installments of its allotted funds from the $17.4 billion dollar bridge loans . On Wednesday, GM got it's $4 billion. Chrysler, on the other hand, is still "finalizing the details of our financial assistance." The U.S. Treasury - the body disbursing the funds - didn't have much to say beyond that, either, merely reiterating that it wants to get the deal done within a timeline that satisfies Chrylser's funding needs. While we wonder what the holdup is, we have no reason to believe that Chrysler won't get its money. It is unlikely that anything has happened in the past three weeks to make the government go "On second thought..." We also wonder how Chrysler plans to meet the next deadline: by February 17, GM and Chrysler need to have submitted plans to demonstrate their long-term viability; on March...
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Filed under: Government/Legal , Chrysler, LLC. Every year, Chrysler rewards its top dealers with an all-expenses paid trip to some exotic location. But with the financial situation at the privately-owned automaker in the crapper, the Pentastar decided to cancel this year's excursion. Chrysler spokesman Stuart Schorr told the Detroit News that "the state of the market and the financial challenges the company faces, it made sense not to hold this year's reward meeting." We're sure the decision to cancel the trip to the Hilton Los Cabos Beach & Golf Resort in San Jose del Cabo, Mexico was monetarily motivated, but there are likely other motivating factors as well. There is the matter of the $4 billion loan from the federal government that kept the doors open at the Auburn Hills, MI automaker. Chrysler already learned that spending money to thank Americans was probably a bad idea. The bigger lesson likely came from insurance giant AIG, who received major backlash for...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM , UAW/Unions Each month, the American Pulse Survey seeks respondents' opinions regarding various political, pop culture and economic issues. Seeing that the auto bailout is a hot topic these days, it is unsurprising that much of the latest survey centered on the $17.4 billion in so-called bridge loans to the Detroit 3 automakers. So, who's to blame for the Motor City's downfall? Survey says: bad management (78.8 percent), the UAW (63.8 percent) and global economic uncertainty (57.7 percent); so say 4,117 Americans. 59.1 percent of respondents believe that the union should offer concessions to the automakers. Lastly, about half of Americans surveyed say that they are just as likely to consider a car from Detroit as they were before all this mess started. Oh, just two more nuggets: The survey also notes that those surveyed find that "Grandma Got Run Over By a Reindeer" is the most annoying Christmas song, and...
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Filed under: Government/Legal , Jaguar , Land Rover It seems like it was just yesterday when Tata agreed to take Jaguar and Land Rover off of Ford Motor's hands for $2.3 billion. But it probably feels like forever for Tata, as a global automotive crisis followed almost immediately after the purchase. The Indian automaker has already pumped hundreds of millions of pounds of working capital into the struggling brands and now Tata is adding "tens of millions" more to stave off an immediate cash crisis. The cash infusion came after the British government also promised tens of millions of pounds to Jaguar and Land Rover, which employs thousands of British workers. "Tens of millions" doesn't exactly sound like a lot of money in the wake of $17.4 billion dollars in loans given to GM and Chrysler, but Jaguar and Land Rover operate on far smaller scales than its American counterparts. Jaguar and Land Rover has seemingly struggled forever, but after sampling the excellent...
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Filed under: Government/Legal , Chrysler, LLC. , GM , Earnings/Financials President George W. Bush will doubtlessly be remembered for many things things, but his parting legacy may yet be his eleventh-hour pledge of $17.4 billion in low-interest loans to General Motors and Chrysler (Ford Motor Company has said it does not require relief at this time). The funding will reportedly come from the Troubled Asset Relief Program (TARP), the financial industry bailout package signed off on this fall. Up front, the White House will earmark $13.4 billion in short-term financing for December and January, and in February, another $4 billion will be disbursed, provided it can draw the funds from the second half of TARP's $700 billion. More details are doubtlessly coming, but the bridge loans appear to hinge largely on whether General Motors and Chrysler are deemed "viable" enterprises by the government. In the terms of the agreement, that means that the automakers must prove whether they...
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Filed under: Government/Legal , Earnings/Financials 55% of Americans are against a federal bailout of U.S. automakers. This, according to a Washington Post /ABC News poll of 1,003 randomly-selected adults nationwide that was conducted by phone last week between December 11 and 14 (we didn't get a call, did you?). 42% of those polled express support for the measure, which died in the Senate late last Thursday night. The poll results show that respondents place 75% of the blame for the current crisis facing Detroit on the shoulders of management, with 22% blaming the economy. On the question of whether automaker bankruptcy filings would be good, bad or make no difference in the economy, the majority (43%) feel that bankruptcy proceedings would have no effect. 34% feel it would be bad, and 17% of those polled believe that it would be a good thing for the broader economy. In related news, an announcement on a new White House-backed bailout deal for GM and Chrysler using money from Hank...
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Filed under: Government/Legal With all signs pointing to White House action on an automaker bailout despite the the bill not making it out of the Senate last Thursday, Canada has its taxpayers' wallets on standby as well. Our neighbors to the north account for a 20% share of the auto industry, and both the federal and Ontario governments are ready to add a commensurate amount of money to the bailout pot if U.S. government action does take place. So, assuming President Bush instructs Henry Paulson, the recently-crowned King of All Our Money, to give Detroit $14B out of TARP to tide them over and keep the RenCen escalators running until this all officially becomes Obama's problem next month, look for an additional $2.8B or so to come across the Detroit River. Thanks for the tip, BrandleSmith! [Source: Reuters] Canada to the rescue! (after U.S.) originally appeared on Autoblog on Sun, 14 Dec 2008 17:31:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this |...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM Click above to start laughing at our auto bailout speech bubble comics During the past few weeks during which the auto industry has struggled to secure government loans to stave off bankruptcy, we've covered the proceedings in an unusual way. We found this one picture of the Detroit 3 CEOs during their testimony to Congress that encapsulated what we felt was going on. GM CEO Rick Wagoner and Chrysler CEO Bob Nardelli are locked in a stare, just as their companies are locked together as the two most desperately in need of gov't aid. Ford CEO Alan Mulally sits off to the right looking the other way, just as Ford stands apart from its domestic competitors as the only with a shot of surviving without federal funds. Though the events of the day are serious matters, we had our fun and kept things light by using this image over and over again, each time adding different speech bubbles with what we thought each CEO was thinking...
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Filed under: Government/Legal , Earnings/Financials 9:30 AM EST has come and gone and the Dow Jones Industrial Average has officially begun its trading day. As expected, the index dropped sharply after the opening bell, which was rung today by singer/actress Mandy Moore. Ms. Moore watched as before sound waves from the bell hit the other side of the room, the Dow had fallen from 8,565 points to 8,348, or about 217 points. At the moment it's back up above 8,400 points, but who knows where we'll go from there. We've been watching cable news all morning, and it was revealed about 20 minutes before the Dow opened today that the White House was reconsidering its stance against tapping the Troubled Asset Relief Fund for troubled U.S. automakers. While we haven't heard anything official from the administration yet, pundits say it does have the power to redistribute some of the $700 billion earmarked for financial institutions to aid automakers. Before the Senate shot down an Auto...
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Filed under: Government/Legal , Earnings/Financials 9:30 AM EST has come and gone and the Dow Jones Industrial Average has officially begun its trading day. As expected, the index dropped sharply after the opening bell, which was rung today by singer/actress Mandy Moore. Ms. Moore watched as before sound waves from the bell hit the other side of the room, the Dow had fallen from 8,565 points to 8,348, or about 217 points. At the moment it's back up above 8,400 points, but who knows where we'll go from there. We've been watching cable news all morning, and it was revealed about 20 minutes before the Dow opened today that the White House was reconsidering its stance against tapping the Troubled Asset Relief Fund for troubled U.S. automakers. While we haven't heard anything official from the administration yet, pundits say it does have the power to redistribute some of the $700 billion earmarked for financial institutions to aid automakers. Before the Senate shot down an Auto...
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM After such a drawn out, difficult process to get an Auto Rescue/Bailout Bill through Congress, there was one issue in particular that led to its defeat at the hands of Senate Republicans. Word has it that hope was in the air around 7PM EST yesterday evening that a deal could be reached among Republicans in the Senate, Congressional Democrats, auto industry representatives and the UAW. Some time later after the industry reps went home, the UAW was left in the room with Senate Republicans negotiating over one final issue that stood in the way of Republican support for the compromise bill. That issue was wage parity with non-union assembly plants run by foreign automakers in the U.S., also known as "transplants". The UAW was willing to consider lowering its wages across the board to meet those of non-union plants, but wanted to delay any cuts until after its current contracts with the Detroit 3 run out in 2011. Plus, it's...
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Filed under: Car Buying , Government/Legal , Hirings/Firings/Layoffs , Plants/Manufacturing , Earnings/Financials Nekkei index plumments, GM retains the services of bankruptcy advisors At a little after 11:00 PM EST on Thursday, the U.S. automaker bailout bill failed to pass through the Senate. The legislation is dead and there are no plans for another bill to go through the process until the end of the year. To quote Senate Majority Leader Harry Reid, this will be "a very, very bad Christmas" for many Americans. Over the past day, Senators have tried to resolve the House-passed bill so it could pass Senate Republican muster, but reports suggest that the UAW was unwilling to accept GOP demands that workers accept parity in pay and benefits. News of the failed bill has already spread to the markets across the Pacific, with the Nikkei index nose-diving over 6%. Things on this side of the world are bound to be worse when trading on the New York Stock Exchange begins tomorrow. According...
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Filed under: Podcasts , Government/Legal , Chrysler, LLC. , Ford , GM , Earnings/Financials , Brabus , Opinion/Editorial Has it really been a month of podcasts already? Alex Nunez and editor Neff join Chris and Dan for Autoblog Podcast Episode 106. Hilarity ensues as we cover the bailout (what else?) and try to touch on a couple other issues before finally deflating like a punctured balloon at the 64-minute mark. Enjoy, and remember to drop any feedback our way at podcast at autoblog dawt com. SUBSCRIBE to the Autoblog Podcast in iTunes ADD the Autoblog Podcast feed to your RSS aggregator DOWNLOAD the show now Autoblog Podcast #106 originally appeared on Autoblog on Tue, 09 Dec 2008 17:32:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
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Filed under: Government/Legal , Chrysler, LLC. , Ford , GM Congress will likely vote this week in favor of giving Detroit automakers at least $15 billion in federal loans, but that healthy chunk of change will come with many strings attached. Several Congressmen have insisted that more concessions come from the UAW, lenders and executives before a cent is sent to Detroit. Another stipulation is a special "Car Czar" to watch over the money and make sure it is being spent wisely. Several congressional officials have mentioned September 11 fund master Kenneth Feinberg as a candidate to keep the automakers in line. Feinberg, who is also an accomplished lawyer, oversaw over $500 million in donations following the September 11 terrorist attacks in 2001. A key element of being "Car Czar" would be wielding the authority to take all the funding back if he determines it's been used improperly. [Source: The Detroit News ] Federal "Car Czar" could be 9/11 fund organizer...
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Filed under: Government/Legal , GM , Saturn Ten years before Chrysler introduced the world to minivans, General Motors had already developed its own version. Toyota sold the Prius at a loss for years before it became popular while GM leased a fleet of electric EV1s for three years before deciding it would never turn a profit. Honda and Toyota both sold small, efficient vehicles for decades even though their sales were relatively small and profits less than stellar. Meanwhile, GM spent billions to establish Saturn to compete with small import cars, only to let the brand go five years with no new products. At least that's the way this New York Times story looks at GM's recent history. Through several interviews, the newspaper paints a picture of a company driven more by short term profits than ingenuity. GM board member George Fisher is quoted in the story saying, "We were late on hybrids. Why were we late? We made a business decision as opposed to a marketing decision. That's...
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